CRIMINAL REVISIONAL JURISDICTION v. Giriraj Daga

Judgment

1. This Criminal Revisional application has been filed by the Petitioner under Section 482 read with Section 401 of the Code of Criminal Procedure, 1973, seeking quashing of proceedings arising out of a Complaint Case being No. CS-55985 of 2019 (Giriraj Daga Vs. Tanay Agarwal) filed under Section 138 of the Negotiable Instruments Act, 1881 and as amendment thereto, pending before the Court of the Learned Metropolitan Magistrate, 11th Court at Calcutta.

2. Brief facts of the case, leading to filing of the instant Criminal Revisional application, are as follows: 2a. It is the specific allegation of the complainant that in pursuant to the request made by the present petitioner, the complainant had lent an advance a sum of Rs. 10,00,000/- (Rupees Ten Lakhs) only to the petitioner/accused by way of short-term unsecured loan for business. It was agreed by the petitioner/accused that he will pay the said loan amount along with interest @ 14% per annum. 3 2b. To discharge his liability, the petitioner had issued a Cheque bearing No. 000063 dated 01.08.2019 for a sum of Rs. 46,795/- (Rupees Forty-Six Thousand Seven Hundred Ninety-Five) only drawn on Kotak Mahindra Bank Limited, Middleton Street Branch, Kolkata – 700 071 towards payment of its outstanding amount as accrued on account of interest dues. After receiving the said Cheque, the complainant deposited the said cheque with his banker, State Bank India, Dalhousie Square Branch, Kolkata – 700 001 on

06.09.2019. But, the said cheque was dishonoured for non-payment by the bankers of the accused with remark ‘Insufficient Funds’. The intimation was received by the complainant from his banker through CTS Return Memo Report dated 07.09.2019. 2c. The complainant through his learned advocate issued a demand notice dated 24.09.2019 under Section 138 of the Negotiable Instruments Act, 1881 and as amendment thereto (hereinafter referred to as ‘N.I. Act’) to the petitioner/accused intimating about the dishonour of the cheque and further demanded to pay the said amount within 15 days from the date of receipt of the demand notice. The said notice was received by the petitioner/accused on

27.09.2019. 4 2d. After receiving the said notice, the petitioner/accused sent a reply dated 03.10.2019 to the said demand notice through his learned advocate but he did not pay the said amount of Rs. 46,795/- (Rupees Forty-Six Thousand Seven Hundred Ninety-Five) only within the stipulated period of time mentioned in the demand notice. Accordingly, the complainant has compelled to file a complaint under Section 138 of the Negotiable Instruments Act, 1881 against the petitioner and same was registered as Complaint Case being No. CS- 55985 of 2019. The Learned Judge issued summons upon the petitioner/accused after taking cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 after being satisfied with the affidavits and documents filed by the Complainant. 2e. After receiving summon from the Court, the petitioner duly entered his appearance before the Learned Trial Court and was granted bail and also pleaded not guilty and claimed to be tried. 2f. According to the petitioner, no specific overt act has been alleged or attributed against the petitioner for the commission of alleged offence. Furthermore, the complainant had actually invested the amount which was given to him into the business as a partner of 5 the business. As such, it does not create any debt or liability either in whole or in part to the petitioner. Hence, continuation of this instant criminal proceeding is an abuse of process of law for which the petitioner is seriously prejudiced. There is no sufficient ingredient for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 in the complaint. Hence, the Petitioner filed this case before this Court by way of Criminal Revisional application praying for quashing the proceedings. Hence, the same has come up before this Bench for its disposal. SUBMISSIONS ON BEHALF OF THE PETITIONER:

3. Learned counsel appearing behalf petitioner/accused submitted that whatever complaint made by the complainant/opposite party under Section 138 of the Negotiable Instruments Act, 1881 is not at all attracted in the instant criminal proceeding. It is not at all maintainable in the eye of law because there was no such transaction or grant of loan or advance to the petitioner arise. He has no authority to lend and advance of Rs. 10 Lakhs as short-term unsecured loan for business charging abnormal interest thereupon @ 14% per annum. The complainant is not a money lender. He does not possess the money lending licence under the Bengal Money-Lenders Act, 1940. Therefore, question of granting 6 loan on interest does not arise at all. Actually, the amount was invested by the complainant in the business as a partner. So, it does

not constitute any prima facie offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The proceeding before the Learned Magistrate is not at all maintainable in the eye of law for which ultimate chances of conviction is remote and bleak. Hence, there is no useful purpose to proceed with the instant proceeding. It would be an abuse of process of law and in expedient interest of justice, the above criminal proceeding deserves to the quashed and all orders passed thereof are also liable to be set aside. 3a. Learned counsel for the petitioner/accused has placed a reliance of a judgment passed in the case of Mrs. Monica Sunit Ujjain Vs. Sanchu M. Menon and Ors.1 to support his aforesaid contention. Wherein the Hon’ble Bombay High Court has held that in cases of money lending business conducted without licence, proceedings could not be maintainable. Therefore, proceedings under Section 138 of Negotiable Instruments Act, 1881 are also not attracted as the money lending business was conducted without a licence and the contract which is forbidden by law is void contract. 1 2023 (1) BC 573 7 SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY:

4. Per contra, learned counsel appearing on behalf of the opposite party vehemently raised objection of such prayer for quashing of the proceedings and further submitted that the judgment referred by the petitioner is not at all applicable in the instant case because the provisions of Bombay Money-Lenders Act, 1946 and Bengal Money-Lenders Act, 1940 are completely distinct. In the Bengal Money Lenders Act, 1940, there is no strict provision applies that without licence, proceeding is not maintainable. Money lending without licence is not completely barred or prohibited by the Bengal Money Lenders Act, 1940. The Bengal Money-Lenders Act, 1940 is basically a regulatory Act and it regulates the business of Money- Lending. Section 8 of the said Act says after certain date of notified in the official Gazette no money-lender shall carry on the business of Money-Lending unless he holds an effective licence. But, the provision is not mandatory. This provision clarifies by the Section 13 of the Bengal Money Lenders Act. 4a. It is further submitted that while filing a case under Section 138 of the N.I. Act, no condition precedent to file money lending licence. Issuance of cheque without sufficient balance in the account 8 and bouncing of the cheque is a criminal offence. A person cannot be debarred from filing and prosecuting complaint under Section 138 of the N.I. Act even if he is doing business of money lending without holding a valid licence. Every statute is enacted for specific purpose and intent and should be read as a whole. The legislature enacts statutes and legislation and takes appropriate precautions at time of drafting and enacting different legal provisions but sometimes conflicts appear in interpretation of different statutory provisions. In this eventuality, Doctrine of Harmonious Construction needs to be adopted. The legal provisions contained in one particular statute cannot be read to defeat legal provisions contained in another statute and both legal provisions contained in different statute should be given maximum effect their operation and applicability. Proceedings initiated under Section 138 of the N.I. Act cannot be quashed only on primarily on ground that the complainant has violated the provisions of the Bengal Money Lenders Act, 1940 as he was engaged in business of money lending without licence. Therefore, provisions of the Bengal Money Lenders Act or Contract Act has no manner of application so far as the proceedings under Section 138 of the Negotiable Instruments Act, 1881 is concerned, as such, the revisional application is liable to be dismissed. Learned 9 counsel has placed reliance of judgments to buttress his aforesaid submissions as follows: i. Samarendra Nath Das vs. Supriya Maitra2; ii. Jupiter Brokerage Services Ltd. Vs. Ektara Exports Pvt. Ltd.3; iii. Sanjoy Agarwala Vs. Ajoy Sarkar4; iv. Hansraj Bansal Vs. State and Another5; v. Dhanjit Singh Nanda Vs. State and Another6; vi. Meenu Bhist Vs. Vijay Kumar Gupta & Another7; vii. Ravinder Paul Vs. Ashwani Kumar8. 4b. It is further submitted that the question of charging abnormal interest, lending loan and issuance of cheque in discharge of liability are disputed question of facts and it cannot be considered while quashing of the proceedings without full-fledged trial. He further placed reliance of judgments to bolster his submissions are as follows: - i. HMT Watches Limited Vs. M.A. Abida and Another9; ii. Rangappa Vs. Sri Mohan10;